Exam 19: Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Which of the following is an analytical procedure to determine if there is idle equipment or equipment that was disposed of but not written off?

When auditing accrued property taxes:

The source of debits in the equipment account is the:

Depreciation expense is normally verified as a part of tests of details of balances rather than as part of tests of controls or substantive tests of transactions.

Which of the following would generally not be a component of the audit of the acquisition and payment cycle?

Describe the two tests auditors can perform to test for the existence and omissions of insurance policies in force.

In the analysis of expense accounts, the auditor verifies transactions in specific accounts to determine whether the transactions are properly classified and accurately recorded.

The failure to capitalize a permanent asset, or the recording of an asset acquisition at the improper amount, affects the balance sheet:

When auditing accrued property taxes:

Typically, analytical procedures are the primary means of verifying income statement accounts resulting from allocations.

Which of the following audit procedures would be least likely to lead the auditor to find an unrecorded fixed asset disposal?

Which of the following accounts would normally not be a part of the acquisition and payment cycle of Prepaid Insurance?

Which of the following expenses is not typically evaluated as part of the audit of the acquisition and payment cycle?

The auditor is examining the accounting entries made to the accumulated depreciation account during the year and notices a significant amount of debits to the account.Which of the following provides the most logical explanation?

Discuss the key internal controls related to the disposal of property, plant, and equipment.

The auditor needs to be aware that most users of financial statements rely most heavily on the ________ for making decisions.

When auditors verify accrued property taxes two audit objectives are especially significant.These are:

In testing acquisitions, the auditor must understand the relevant accounting standards to insure the client adheres to accepted accounting practices for property, plant, and equipment.Describe three of the auditor's concerns in this area.

A set of records for each piece of equipment that includes descriptive information, date of acquisition, original cost, current year depreciation, and accumulated depreciation is the:

The primary accounting record for property, plant, and equipment accounts is the fixed asset master file.What is included for each fixed asset in the master file?